Microsoft’s Challenges

The Economist writes:

The business and regulatory challenges facing Microsoft are related, because the firm needs to be free to compete against rivals in nascent markets on the one hand, yet almost anything it does will invite antitrust concerns on the other. Microsoft’s Internet Explorer holds roughly 85% of the market, while the rival Firefox browser boasts 10-15%. But Microsoft lags behind in search. Worldwide, Google has around 50% market share, Yahoo 28% and Microsoft’s MSN 13%. The stakes are huge: online advertising in America, today estimated to be worth $12.5 billion, is expected to double by 2010.

At the same time, revenue is starting to emerge from new areas. So PC vendors are able to earn income from software firms for pre-installing their code on machines; web-browser firms can sell to search engines the right to be the default setting (or favour their own brand, as with Microsoft). This should be allowedit’s a free market, after all and Google, not Microsoft, is dominant.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.